One of the first things I learned, when I first started investing as a contrarian investor in the early 90s, is that there are some companies that really are bad. They have fallen for a reason, and will continue to fall.
The sweet spot is the grade B large cap that can improve its performance if it has to. The excellent companies don’t fall enough to be worthwhile, and the bad companies keep going down as they get into more and more trouble.
This was a factor on my BP buy.
http://www.washingtonpost.com/wp-dyn/content/article/2010/06/03/AR2010060303805.html
BP’s Deepwater oil spill hurts British pensioners, investors
By Karla Adam
Friday, June 4, 2010
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Thousands of Britons are invested in the British oil giant through pension funds — analysts estimate that about 1 pound in every 7 pounds paid in dividends to British pension funds comes from BP.
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